Stocks are seeing continued strength in mid-afternoon trading on Wednesday after some early weakness. The strength comes as investors react positively to some mixed economic news and await news from the G20 conference in London.
The initial downward move came on the heels of the release of a report from ADP showing that non-farm private employment fell by a bigger than expected 742,000 jobs following a revised decrease of 706,000 jobs in February.
Meanwhile, the National Association of Realtors said its index of pending home sales rose 2.1 percent to 82.1 in February from a reading of 80.4 in January. The increase by the index came as a surprise to economists, who had expected the reading to come in unchanged.
The Commerce Department also released its monthly report on construction spending for February, showing that spending fell 0.9 percent. Analysts had expected spending to fall 1.9 percent following a 3.5 percent decline in the previous month.
Additionally, the ISM Manufacturing index edged up to 36.3 in March from 35.8 in February, although a reading below 50 still indicates a contraction in the sector. Economists had been expecting the index to come in at 36.0.
Prior to the G20 summit, President Obama held a series of bilateral meetings with world leaders as he attempts to set the stage for a productive meeting.
Obama met with Russian President Dmitri Medvedev, releasing a joint statement in which they promised a fresh start in relations between our two countries.
We, the leaders of Russia and the United States, are ready to move beyond Cold War mentalities, the statement said.
Meanwhile, in an interview with RTT News, Sam Stovall, chief investment strategist of Standard & Poor's Equity Research said it is possible that the markets will see green arrows through the month of April because there's a good chance the bear market low was put in on March 9th.
In terms of this being the beginning of a bull market, Stovall said the jury is still out, though the improvements in economic data and market price fundamentals help make the bullish case. Stovall feels that longer-term investors who are willing to start dollar cost averaging will be rewarded down the road.
In recent trading, the major averages have pulled back off their highs for the session, although they remain firmly positive. The Dow is currently up 139.62 at 7,748.54, the Nasdaq is up 19.59 at 1,548.18 and the S&P 500 is up 11.82 at 809.69.
The considerable advance being shown by the Dow comes as the vast majority of the components of the blue chip index are moving higher on the day.
Software giant Microsoft (MSFT) is turning in one of the Dow's best performances, rising 4.7 percent. With the gain, Microsoft has broken through recent resistance to reach its highest level in over a month and a half.
American Express (AXP) and Citigroup (C) are also showing notable gains on the day, up 7.4 percent and 5.1 percent, respectively. The advances by American Express and Citigroup come as many other financials are also posting gains on the day.
DuPont (DD), Caterpillar (CAT), and Alcoa (AA) are among the other Dow components that are posting notable gains.
At the other end of the spectrum, General Motors (GM) is posting one of the only losses within the blue chip index. The stock is down 0.5 percent after the company announced that its March sales declined 44.7 percent to 156,380 units.
Stocks in the steel sector are helping to lead the markets higher, driving the Amex Steel Index up 5.3 percent. Within the sector, one of the best performances is being shown by Arcelor Mittal (MT), which has risen to its highest level in nearly a month and a half on a gain of 9.3 percent.
Gold stocks are also posting considerable gains on the day, lifting the Amex Gold Bugs Index up 4.7 percent. The advance comes as investors respond to an increase by the price of gold.
While telecommunication, wireless, and banking stocks are also posting considerable advances on the day, biotechnology stocks are some of the only losers of the session, forcing the Amex Biotechnology Index down 1.8 percent.
In overseas trading, stock markets across the Asia-Pacific region closed mostly higher on Wednesday, with Japan's Nikkei 225 Index advancing by 3 percent. However, the Australian and Hong Kong markets bucked the uptrend.
Meanwhile, the major European markets closed green across the board. The French CAC 40 Index and the German DAX Index ended the session up 1.2 percent and 1.1 percent, respectively, while the U.K.'s FTSE 100 Index posted a gain of 0.8 percent.
In the bond market, treasuries are continuing to see some strength, driving the yield on the benchmark 10-year note down 1.8 basis points to 2.667 percent.
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